Logistical Solution

Based on our findings during the visit, one of the primary concerns was high logistics and
delivery costs. Being one of the significant costs involved across product offerings, the
component is very uncertain to multiple parameters like availability of transportation, route, and
modes involved. A substantial number of orders have been declined in the past owing to the
inability in covering delivery by a limited margin. It clearly shows that the product is quite
promising, and customer response, retention, and recall are also positive.

We wish to propose a cost-saving alternative to this challenge considering certain assumptions.

Assumptions: Recurring demand in the hub - eg. Dehradun.

● An inventory hub, having considerable stock of the most frequently bought items and
product range can be established.
● Bulk delivery of items from New Tehri to Dehradun - 45 km
● Average shipping cost for 1500 kg - Rs. 1000
● Per kg cost - 0.66
● Inventory space monthly rental of 15000 for 1000 sq. ft.
● Recurring stable demand would help us ensure a high inventory turnover ratio.
● This would result in reduced inventory cost per kg.
● All other freight charges would be only for last-mile delivery, to be used with the
commercial logistics companies.